2020 was the year of technology companies thriving in a world of pandemic restrictions and a movement online. 2021 was a more quirky year as companies benefiting from rising demand for reopening did well, but not as well as predicted, while companies that either solved or benefited from supply chain problems also did well, such as the semiconductor and energy sectors. illustrate the sector.
Shipping, or at least certain parts of the industry, was another big winner. All those photos of ships waiting to enter ports off the west coast, and all the companies that made 'one-off' last year. increased freight costs in revenues represent the challenges the global economy has faced, and companies in the container ship industry – be it liner shipping, ship charterers or box rental companies – have all done pretty well as a result. As you will hear in this conversation, that is quite an understatement.
What does this say about the sector's prospects in 2022? I spoke with J Mintzmyer, lead researcher at Value Investor's Edge, about the state of the industry. J is one of the foremost global marine experts, so his words always carry weight in the industry. That he puts in an excellent market performance for 2021, as he discusses at the beginning of our video, only adds to that weight.
The outlook for 2022? J argues that while there's no way to repeat 2021, the risk-reward looks as attractive as it's ever seen. We talk about that risk-reward by diving into specific subsectors of the shipping industry, including container ships, as well as dry bulk and tankers. We also discuss the supply chain issues that still persist and what the "insidious" trends were that brought us to this place. As always, J shares some names worth checking out for investors, including ZIM Integrated Shipping Services Ltd (NYSE:), Danaos Corporation (NYSE:), Textainer Group Holdings Ltd (NYSE:), and International Seaways Inc (NYSE:). And as always given the industry's reputation, we discuss shipping governance and how it has held up in this turbulent, profitable period.
Watch the full video above and the show comments below.
1:00 minute mark – 2021 Review – a year of two parts, and unprecedented movements
8:00 – 2022 outlook – continued excitement for container ships
13:30 – Shipping Supply Chain Outlook
17:00 – How is the supply chain resolved?
21:00 – The outlook for container shipbuilding
24:30 – Barometer reading corporate governance in shipping, and Zim as an example
30:30 – Other sectors to watch – dry bulk and tankers
37:00 – Names to watch – INSW
Related ETFs: SonicShares™ Global Shipping ETF (NYSE:) and Breakwave Dry Bulk Shipping ETF (NYSE:)
J Mintzmyer is long ZIM, DAC, TGH, INSW. Daniel Shvartsman has no positions in said stocks. Nothing in this video should be construed as investment advice.